Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the third quarter 2024.
“Delek Logistics continues to provide the best combination of yield and growth in the midstream sector. We are proud of the 47th consecutive increase in our distribution and we expect to continue to increase our distribution in the future. The completion of our previously announced strategic actions position Delek Logistics as a premier, full-service, midstream provider in the prolific Permian Basin,” said Avigal Soreq, President of Delek Logistics' general partner.
"Our recent equity offering allows us to bring forward additional growth opportunities and strengthen our position in the Delaware basin. We will continue to strengthen and grow DKL through a prudent management of liquidity and leverage," Mr. Soreq continued.
DKL reported third quarter 2024 net income attributable to limited partners of $33.7 million, or $0.71 per diluted common limited partner unit. The third quarter 2024 net income attributable to limited partners included $8.7 million of transaction costs and impacts of sales-type lease accounting. This compares to net income attributable to limited partners of $34.8 million, or $0.80 per diluted common limited partner unit, in the third quarter 2023. Net cash provided in operating activities was $24.9 million in the third quarter 2024 compared to $46.8 million in the third quarter 2023. Distributable cash flow, as adjusted was $62.0 million in the third quarter 2024, compared to $61.4 million in the third quarter 2023.
For the third quarter 2024, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $69.2 million compared to $98.2 million in the third quarter 2023. The third quarter 2024 EBITDA included $8.7 million of transaction costs and impacts of sales-type lease accounting. For the third quarter 2024, Adjusted EBITDA was $106.8 million compared to $98.2 million in the third quarter 2023.
Distribution and Liquidity
On October 29, 2024, Delek Logistics declared a quarterly cash distribution of $1.100 per common limited partner unit for the third quarter 2024. This distribution will be paid on November 14, 2024 to unitholders of record on November 8, 2024. This represents a 0.9% increase from the second quarter 2024 distribution of $1.090 per common limited partner unit, and a 5.3% increase over Delek Logistics’ third quarter 2023 distribution of $1.045 per common limited partner unit. Distribution cash flow coverage ratio, as adjusted for the quarter was 1.1x, lower than our target of 1.3x, primarily because of transitory timing effects. H2O Midstream closed late in the third quarter and W2W distributions came in post the quarter close in October.
As of September 30, 2024, Delek Logistics had total debt of approximately $1.89 billion and cash of $7.3 million and a leverage ratio of approximately 4.15x. Additional borrowing capacity, under the $1.15 billion third party revolving credit facility was $695.1 million.
Consolidated Operating Results
Adjusted EBITDA in the third quarter 2024 was $106.8 million compared to $98.2 million in the third quarter 2023. The $8.6 million increase in Adjusted EBITDA reflects higher contributions from the Midland Gathering systems, terminalling and marketing rate increases, as well as impacts from the W2W dropdown.
Gathering and Processing Segment
Adjusted EBITDA in the third quarter 2024 was $55.0 million compared with $52.9 million in the third quarter 2023. The increase was primarily due to higher throughput from Permian Basin assets and incremental EBITDA from the H2O Midstream acquisition.
Wholesale Marketing and Terminalling Segment
Adjusted EBITDA in the third quarter 2024 was $24.7 million, compared with third quarter 2023 Adjusted EBITDA of $28.1 million. The decrease was primarily due to a decline in wholesale margins.
Storage and Transportation Segment
Adjusted EBITDA in the third quarter 2024 was $19.4 million, compared with $17.9 million in the third quarter 2023. The increase was primarily due to increased storage and transportation rates.
Investments in Pipeline Joint Ventures Segment
During the third quarter 2024, income from equity method investments was $15.6 million compared to $9.3 million in the third quarter 2023. The increase was primarily due to the impacts of the W2W dropdown.
Corporate
Adjusted EBITDA in the third quarter 2024 was a loss of $7.9 million compared to a loss of $10.0 million in the third quarter 2023.
